Entrepreneurship Abroad: A Guide to Setting Up in Luxembourg

Published on September 29, 2025 and written by Cyril Jarnias

Luxembourg, with its economic stability and business-friendly environment, attracts many expatriate entrepreneurs looking to establish their businesses there. This comprehensive guide outlines the essential steps to bring your entrepreneurial project to life in the Grand Duchy.

Why choose Luxembourg to start a business?

Luxembourg offers numerous advantages to foreign entrepreneurs:

• A stable and prosperous economy
• Favorable tax environment
• Strategic position in the heart of Europe
• Business-friendly regulatory framework
• Skilled and multilingual workforce

These advantages make Luxembourg a prime destination for expatriates looking to venture into international entrepreneurship.

Legal structures for starting a business in Luxembourg

Several legal forms are available to expatriate entrepreneurs in Luxembourg:

Private Limited Liability Company (SARL)

The SARL is the most common legal form in Luxembourg, particularly suitable for small and medium-sized enterprises. Its main features are:

• Minimum share capital: €12,000
• Between 1 and 100 partners
• Liability limited to contributions
• Flexible management

Public Limited Company (SA)

The SA is more suitable for large companies or those considering going public. Its specificities:

• Minimum share capital: €30,000
• At least one shareholder
• More formal governance structure
• Ability to issue shares

Simplified Limited Liability Company (SARL-S)

Introduced in 2016, the SARL-S aims to facilitate entrepreneurship:

• Minimum share capital: €1
• Reserved for individuals
• Simplified creation procedures
• Limited to 5 SARL-S per person

Administrative procedures for starting a business in Luxembourg

1. Obtain a business permit

Any commercial, artisanal, or professional activity in Luxembourg requires a business permit. To obtain it, you must:

• Demonstrate your professional qualifications
• Provide proof of professional integrity
• Have a fixed business location in Luxembourg

2. Draft the company’s articles of association

The articles of association must be drafted by notarial deed for SARLs and SAs. They define:

• The company name and business purpose
• The amount of share capital
• The company’s operating procedures

3. Register with the Trade and Companies Register (RCS)

Registration with the RCS formalizes the creation of your business. You will need to provide:

• The company’s articles of association
• The business permit
• Proof of share capital deposit

4. Register with social security

As an entrepreneur, you must register with the Joint Social Security Center (CCSS) to receive social coverage.

5. Register for VAT

If your annual turnover exceeds €35,000, you must register for VAT with the Registration and Estates Administration.

Tax considerations for expatriate entrepreneurs in Luxembourg

The Luxembourg tax system is generally favorable to businesses. Here are the main taxes to know:

Corporate income tax

The corporate income tax rate in Luxembourg is 17% for income exceeding €200,000. Additionally:

• Employment fund contribution (7% of the tax amount)
• Municipal business tax (rate varies by municipality)

Value Added Tax (VAT)

The standard VAT rate in Luxembourg is 17%, one of the lowest in Europe.

Personal income tax

Sole proprietors and partners in partnerships are subject to personal income tax, with progressive rates up to 42%.

It is highly recommended to consult an accountant or tax advisor to optimize your tax situation as an expatriate entrepreneur in Luxembourg.

Access to financing for expatriate entrepreneurs in Luxembourg

Luxembourg offers various financing options for entrepreneurs:

Public aid

The Luxembourg government offers several business support programs, including:

• Investment aid for SMEs
• Research, development, and innovation aid
• Export aid

Bank financing

Luxembourg banks offer loans and credit lines tailored to business needs.

Venture capital and business angels

Luxembourg has several venture capital funds and business angel networks to finance innovative startups.

Crowdfunding

Crowdfunding platforms allow raising funds from the general public.

Cultural differences in business practices in Luxembourg

To succeed in your entrepreneurship in Luxembourg, it is essential to understand the country’s cultural specificities:

• Multilingualism: Luxembourgish, French, and German are the official languages. Proficiency in English is also an asset.
• Punctuality: Luxembourgers place great importance on punctuality in professional relationships.
• Formalism: Business relationships are generally formal, with a well-defined hierarchy.
• Consensus: Decision-making is often done by consensus, which can lengthen processes.
• Discretion: Luxembourgers appreciate discretion in business; avoid overly ostentatious displays.

Adapting your business approach to these cultural particularities will facilitate your integration and entrepreneurial success in Luxembourg.

Support resources for expatriate entrepreneurs in Luxembourg

Many organizations support expatriate entrepreneurs in their projects:

House of Entrepreneurship

This one-stop shop at the Chamber of Commerce offers personalized support to business creators.

Luxinnovation

The national innovation agency supports innovative startups and helps them grow.

Incubators and accelerators

Luxembourg has several support structures for startups, such as the Luxembourg City Incubator or Technoport.

Entrepreneur networks

Associations like Paperjam Club or APSI (Association of Information Society Professionals) help develop professional networks.